Air Cargo Newsdesk

Why Trump trade wars are the enemy of air cargo

AIR CARGO companies are facing major disruption of established international trade patterns over the next two years, particularly whilst Donald Trump remains as president of the United States, writes Thelma Etim.

The air cargo industry should heed the latest dire warnings from Roberto Azevêdo, director-general of the World Trade Organisation (WTO) about the spectre of future trade wars. He predicts that specific trade policy measures “may trigger an escalation of trade barriers across the globe.”

Hard-won air cargo trade lane agreements could be irreversibly damaged in the wake of the turbulence.

“In recent weeks, we have seen the spectre of protectionism rising again. This is of real concern. More than ever, we need to keep strengthening the multilateral trading system,” Azevêdo argues.

Donald Trump’s tariff on US steel imports

“We cannot ignore this risk and I urge all parties to consider and reflect on this situation very carefully. Once we start down this path, it will be very difficult to reverse direction,” he adds.

Azevêdo’s unequivocal comments come amidst the fallout over Trump’s decision to impose a 25 per cent tariff on US steel imports, and a 10 per cent tariff on aluminium.

The US president has wasted no time in implementing his bellicose election campaign mantra ‘America First’. He withdrew from the Trans-Pacific Partnership – now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – in January 2017.

The future of the WTO is now in doubt too, with the president calling for the highly respected advisory body to be reformed.

But the metals tariffs and further similar measures will potentially unravel the existing global multilateral trade system, vital for a stable and thriving air cargo industry.

South Korea, China – and India, whose steel and aluminium exports to the USA alone are worth more than US$1 billion – are likely to protest most about Trump’s decision to raise import duties, urge reports.

It is no wonder that Alexandre de Juniac’, director general and chief executive of the International Air Transport Association (IATA), has tempered his satisfaction with the airfreight industry’ current growth upswing. “Nobody wins when protectionist measures escalate,” he says in a statement issued by the airline association.

But despite America’s threat to tear up the trade rule book, WTO boss Azevêdo is remarkably hopeful that heads of state will eventually refrain from dramatic reactionary responses.

“An eye for an eye will leave us all blind – and the world in deep recession. We must make every effort to avoid the fall of the first dominoes. There is still time,” he asserts.